If corporate headquarters for UPS in Atlanta is considering adding to its 96,000 + fleet of delivery vans, what is year 5’s depreciation expense using MACRS if one van costs $78,500? (Table 17.4 and Table 17.5)
If corporate headquarters for UPS in Atlanta is considering adding to its 96,000 + fleet of delivery vans, what is year 5’s depreciation expense using MACRS if one van costs $78,500? (Table 17.4 and Table 17.5)
Chapter8: Depreciation And Sale Of Business Property
Section: Chapter Questions
Problem 6MCQ: Which of the following is not true about the MACRS depreciation system: A salvage value must be...
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If corporate headquarters for UPS in Atlanta is considering adding to its 96,000 + fleet of delivery vans, what is year 5’s
******TABLES ATTACHED*******************
Transcribed Image Text:TABLE
17-4
Class recovery
perlod (life)
Asset types
Modified Accelerated Cost Recovery
System (MACRS) for assets placed in
service after December 31, 1986
3-year
Racehorses more than 2 years old or any horse other than a racehorse that is
more than 12 years old at the time placed into service; special tools of certain
industries.
5-year"
Automobiles (not luxury); taxis; light general-purpose trucks; semiconductor
manufacturing equipment; computer-based telephone central-office switching
equipment; qualified technological equipment; property used in connection
with research and experimentation.
Railroad track; single-purpose agricultural (pigpens) or horticultural structures;
fixtures; equipment; furniture.
7-year"
10-year*
New law doesn't add any specific property under this class.
15-year
Municipal wastewater treatment plants; telephone distribution plants and
comparable equipment used for two-way exchange of voice and data
communications.
20-year
Municipal sewers.
27.5-yeart
Only residential rental property.
31.5-yeart
Only nonresidential real property.
*These classes use a 200% declining-balance method switching to the straight-line method.
*These classes use a 150% declining-balance method switching to the straight-line method.
These classes use a straight-line method.
Transcribed Image Text:TABLE
17-5
Annual recovery for MACRS
3-year class
(200% D.B.)
5-year class
(200% D.B.)
7-year class
(200% D.B.)
10-year class
(200% D.B.)
15-year class
(150% D.B.)
20-year class
(150% D.B.)
Recovery
year
1
33.00
20.00
14.28
10.00
5.00
3.75
45.00
32.00
24.49
18.00
9.50
7.22
3
15.00*
19.20
17.49
14.40
8.55
6.68
4
7.00
11.52*
12.49
11.52
7.69
6.18
11.52
8.93*
9.22
6.93
5.71
6
5.76
8.93
7.37
6.23
5.28
8.93
6.55*
5.90*
4.89
8
4.46
6.55
5.90
4.52
9
6.55
5.90
4.46*
10
6.55
5.90
4.46
11
3.29
5.90
4.46
12
5.90
4.46
13
5.90
4.46
14
5.90
4.46
15
5.90
4.46
16
3.00
4.46
*Identifies when switch is made to straight line.
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